Hi, there is rumor in our co. recently saying that they will retrench people but co. will only pay Retrenchment Compensation to employees salary below RM1500. Those has RM1501 and above has no compensation, just get the compensation for short notice as stated in the employment letter (2 months).

If an executive salary is RM2500, does it mean he/she will get RM7500 as compensation when co. retrench them? Can he go to Labor Office or IR Dept to report? Most of executive here are working more than 10 yrs, it's not fair if co. don't pay compensation based on years of service.

What can we do if this really happen? Labor Law never covered employee salary above RM1501?

Hi, there is rumor in our co. recently saying that they will retrench people but co. will only pay Retrenchment Compensation to employees salary below RM1500. Those has RM1501 and above has no compensation, just get the compensation for short notice as stated in the employment letter (2 months).

If an executive salary is RM2500, does it mean he/she will get RM7500 as compensation when co. retrench them? Can he go to Labor Office or IR Dept to report? Most of executive here are working more than 10 yrs, it's not fair if co. don't pay compensation based on years of service.

What can we do if this really happen? Labor Law never covered employee salary above RM1501?

No such thing.

The only ppl who will not get retrenchment benefit are new staff.

Companies that refuse to pay retrenchment benefit are companies that will close shop soon (i.e. can no longer be sued or very difficult to sue the directors)

Retrenchment benefit is calculated base on base salary x number of years of service x bonus factor (a number that they think is suitable, e.g. 1.5 for exec, 2.0 for low paid salary), e.g. 1.5k x 6 years of service x 1.5

If there is no retrenchment benefit, go talk to PERKESO within 2 weeks of receiving termination notice.

Retrenchment benefit is calculated base on base salary x number of years of service x bonus factor (a number that they think is suitable, e.g. 1.5 for exec, 2.0 for low paid salary), e.g. 1.5k x 6 years of service x 1.5

Is that statutory? I can't find anything of that sort in the EA. All I can find is:

QUOTE

four weeks for employees with less than two years of service; six weeks for employees with two to five years of service; and eight weeks for employees with more than five years of service.

So if TS company retrenches staff and pays them 2 months for their notice period it does seem like they've already fulfilled the mandatory payment as per EA.

[edit] sorry, looked at the wrong thing.

QUOTE

Severance pay in Malaysia is known as retrenchment benefits, or termination and lay-off benefits, which are paid at the following rates:10 days wages for each year of service for employment shorter than two years;15 days wages for each year of service for employment longer than two years but shorter than five years; and20 days wages for each year of service for employment of five years or longer.

This is spelt out in the EA, which only applies to "All workers whose earnings do not exceed RM1,500 a month and allmanual workers irrespective of their earnings"

However I've heard that the EA has been amended to cover all employees in Malaysia, and so the RM1.5k limit doesn't apply anymore. Of course I'm no labor law expert, so feel free to correct me.

Is that statutory? I can't find anything of that sort in the EA. All I can find is:So if TS company retrenches staff and pays them 2 months for their notice period it does seem like they've already fulfilled the mandatory payment as per EA.

[edit] sorry, looked at the wrong thing.This is spelt out in the EA, which only applies to "All workers whose earnings do not exceed RM1,500 a month and allmanual workers irrespective of their earnings"

However I've heard that the EA has been amended to cover all employees in Malaysia, and so the RM1.5k limit doesn't apply anymore. Of course I'm no labor law expert, so feel free to correct me.

What can we do if this really happen? Labor Law never covered employee salary above RM1501?

Dependant on your occupation mode. For example, if your occupation is non-manual, the Employment Act 1955 does not cover yu.

However if your salary is less than RM5000 and if your employer fails to provide yu whatever stated in the contract of service, yu can still make claim at the Labour Office. Anyway, it's your call to make the decision.

Well, survived 2 retrenchments (that is how bad is the economy), speaking from experience. 1st one got only 3 months coz worked for less than 3 years. 2nd one got almost 1 year, argue all you want about EA, I still got my compensation.

When the company decided to retrench ppl, the MD's compensation was skyrocket (came up to a few hundred thousand), who said employee paid above rm 1.5k gets no compensation.

I have my own panel lawyers to make my claims, and have made many number of trips to PERKESO to taruk my exboss.

BTW, you all choose what you all want to believe lah, ain't go the time to be too bothered with that.

p.s: Yu are not bad in Economics. We all LEARN Economics EVERYDAY. From the steps yu've taken from your house door right till the LRT Station or your automobile. It's all Economics related. I'm sure yu'll learn more from day to day. Oh ya! From my first paragraph, yu may want to do some readings on Economies of Scale (EoS) and Equilibrium Point per Input/Output (EPpI/O).